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DeFi project crashes after flash loan attack at 99%

 


DeFi project New Free DAO lost over $1.25 million in flash loan attack, PeckShield reports. As a result, the price of the NFD token plummeted by 99%.


According to blockchain security firm PeckShield, DeFi project New Free DAO suffered a $1.25 million loss. This is likely due to a Flash Loan attack that caused the value of their own NFD token to plummet by over 99%.



After the successful attack, the hacker exchanged the captured BNB worth $1.25 million for BSC-USD. The DeFi token NFD was apparently aimed at the NFT niche and offered a variety of features.

The project probably didn't exactly cause a stir in the crypto space. Not much is known about New Free DAO aside from losing over $1 million.


A number of projects have already fallen victim to the flash loan attacks that are popular in the DeFi sector . Essentially, the attacker uses an unsecured loan to create an arbitrage, i. H. manipulate the price of an asset. These attacks are relatively easy to execute and therefore very popular.


Flash loan attacks rock DeFi

In the last few days, more and more projects have fallen victim to a Flash Loan attack. According to blockchain cybersecurity firm CertiK, a smart contract on the Avalanche blockchain and its associated liquidity providers were robbed of a whopping $370,000 in one such attack . It is believed that Curve Finance was also affected by such an attack.

Cream Finance also suffered three such attacks last year - the last one stealing $130 million. PancakeBunny even lost $200 million in one of the largest known flash loan attacks .


The security of DeFi protocols is therefore gaining more and more priority . Although the developers of various projects are constantly working to improve security, these attacks seem to have no end.


Safety as top priority

Due to its high liquidity, the DeFi market has always been a popular target for hackers . New projects and protocols with insufficient security checks often fall victim to the attackers.


Over the past 18 months, many large-scale projects have increased their focus on security as these attacks can have cascading effects. Certik reported in January that 44 attacks in 2021 were due to centralization issues . Other causes are missing event emissions, unlocked compiler versions and insufficient input validation.


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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